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A Reader's Question: How Can We Avoid Having the Digital Part of Our Audience Ignored by a Circulation Audit?

Posted on Thursday, July 01, 2010 at 7:50 PM

Q. Perhaps you can explain a way out of a circulation problem we're having. Our publication is audited by ABC, and I'm having trouble getting them to count all of our paid audience. We have a breaking news section that is very popular. In fact, our reader research tells that almost 20 percent of our subscribers get the magazine just for that feature. Most read nothing else. Two years ago, we moved that content online, password protected, and removed it from the print content to better serve the readers. This has been very well received. Many of those breaking news readers have asked about opting out of the print portion because they don't need it anymore. In response, we started offering that option. So here's my dilemma. The size and profile of our readership remains the same. But, as the 20 percent who have only been interested in the breaking news opt out of the print copies, according to ABC rules, apparently our rate base is declining. But, of course, it is not.

A. First of all, I wish to congratulate you on your use of an adaptive strategy with your breaking news section. What you've done is a good example of delivering different parts of your magazine via the most appropriate channels.

We described your circulation audit dilemma to ABC senior vice president for communications and strategic planning Neal Lulofs. He offers a couple of suggestions. The first is that you consider your online breaking news section as a non-replica edition, which would be reported in Paragraph 1 of the ABC reports. Lulofs adds, "…this magazine could easily explain to its advertiser partners where the digital edition is reported and how its audience is not declining based on the new distribution strategy by pointing out the data on an ABC report." His other suggestion is that you "use an ABC Multimedia Report that includes website traffic activity, such as unique users and page impressions in Paragraph 1A. The magazine could even opt to separate out its breaking news section and give more detailed statistics on the type of readers visiting this area of the website that potential advertisers may find helpful when creating their media plans."

So, there doesn't seem to be a problem in getting your breaking news readers reported. What's left comes down to whether they are reported as part of your rate base. Lulofs points out that claiming a rate base is optional. One remedy would be to stop claiming a rate base and simply report your audience size in its various dimensions.

I can understand why you might not want to do that, though. A rate base is in effect your guarantee to advertisers about the size of your audience. Lulofs suggests that in a unified print edition or its digital replica, ads are presented in "an editorial environment that encourages ad readership." That seems to imply that the "encouragement" exists only if fairly identical ad and edit contents are all bundled, whether in print or digital packages.

You present an interesting example of the inapplicability of that concept. If up to 20 percent of your readers read the print edition for the breaking news section and nothing more, there isn't much of an "environment of encouragement" to read ads in other parts of the magazine. Over the years, studies of various magazines have shown that through-the-book readership is typically less than 100 percent. There can be considerable variance from publication to publication. And, what's to say that in your digital breaking news section, there can't be content or links that could actually encourage ad readership either in the print part of your magazine or its digital replica?

The idea that a magazine is a spatially unified collection of advertising and editorial represents a bygone era, an old business paradigm. More and more, magazines will be reinventing themselves. Some of a magazine's content may be delivered in print, some online, some by email. Each is a vital piece of what adds up to be a solitary magazine brand. The components aren't separate editions, they're parts of the whole. Thinking otherwise seems to be paradigmatically anchored to the past.

Circulation auditing rules that don't take this into account will tend to favor a status quo based on the print model. It seems to me that it is not valid for an auditing organization to impose that. It places forward-looking publishers at a disadvantage. An auditing organization should count and certify audience and rate base in whatever form a publisher may have aggregated it. Telling publishers what is or is not audience or rate base would seem to be outside the franchise of an auditing organization. We'll send ABC a copy of this article with the request that they consider updating their notion of what constitutes a magazine in this day and age.

(Note: More on this topic will appear in the forthcoming June issue of STRAT Newsletter. Look for "Digital Readers: Second-Class Citizens?" by research editor Meredith L. Dias.)

A Reader's Question: How to Collect Advertising Money That's Owed?

Posted on Thursday, December 17, 2009 at 4:12 PM

Q. Right now, my biggest concern is getting paid by advertisers that owe us money. We are a monthly trade magazine with a circulation of 100,000. Throughout the recessionary period, we tried to work with advertisers who couldn't pay net 30. For some longtime advertisers we've been especially lenient. After all, we have relationships with them that go way back. But now we're getting to the end of our rope, and frankly, I'm concerned about how much credit we've extended. Worse yet, the advertisers don't seem so sympathetic to us when we call them requesting that they pay up. What can we do to get out of this spot?

A. The economic conditions have put a number of publishers in precarious positions such as yours. We've seen how advertisers have fallen behind for a number of very different reasons. I'll identify the three main categories, and then suggest ways to deal best with each.

The first category is the advertiser who has a good and established product line that serves a real need. He's continued to advertise as before. But, the reason he can't pay now is because the recession has weakened his sales. Actually, it's good that he's maintained his advertising. Research has shown that those advertisers who maintain their advertising presence are able to emerge from a recession far stronger than those who pulled back their ads. It could be, however, that this advertiser's particular ad strategies and offers have not been adapted appropriately to the current economic circumstances.

So, my advice is to work with the advertiser in three ways:

a. Have your sales staff help him to hone his advertising message. Come up with offers and copy that will appeal to prospective buyers based on where they're at in the recession. (If your sales staff is ill-equipped to do this, give me a call and I'll explain how to get them up to speed quickly).

b. If the advertiser is making non-productive ad decisions, help guide him toward more efficacious ad decisions. For instance, if he's spending money on position, it would be better to steer him toward greater frequency, greater size, or more color. Research has shown that position doesn't impact results very much, contrary to popular beliefs.

c. If the advertiser needs sales, be sure that his ads are actually focused on asking for orders. This may not be the right time for image ads or institutional pitches. Counsel him to run ads that will elicit orders, not just ones that make the company look good.

Approach all this cautiously. Put this advertiser on a payment plan to work off the arrearage. And, ask for a partial payment (at least enough to cover your costs) with each new insertion order. Also, get a D&B on the company to assess the risk of an impending bankruptcy. Set clear limits for the credit that you've extended and will extend.

The next category is the advertiser who has many of the good qualities of the advertiser described above. In this case, however, since she has been unable to pay for ads that have already run, she's voluntarily stopped advertising. That in itself may put collection of her debt in greater jeopardy. See if you can get her to resume advertising, albeit with a requirement that some cash start flowing in your direction at the same time, as suggested above. It may sound counterintuitive to solicit more ads from a company that hasn't paid for past advertising. However, if this is a viable company with a product that meets a market demand, the surest route to getting your money may be by helping to stimulate that company's sales.

The last category includes those companies that never were doing very well in the first place. Perhaps their products are mismatched for the marketplace, or they lack customer loyalty as a result of poor customer service, or they've simply been a slip-shod operation. With these guys, you should do whatever is necessary to establish your legal claim for what's owed and press for collection. In the meantime, allow them to advertise only on a cash-with-order basis.

It would have been good if you had instituted these practices earlier. But, the sooner you put them in place, the better will be your chances of collecting what you're owed.

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